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Dealing with financial hardship

What to do when times get tough, including how to get support from WINZ.

While many Kiwis stress about money, those experiencing financial hardship are under severe pressure to make ends meet. Typical situations that can put you under financial hardship include: losing your job, having to deal with large medical expenses, experiencing a relationship breakdown, struggling to meet debt repayments or just finding it hard to deal with everyday expenses.

This guide takes you through what financial hardship is and what to do if you’re experiencing it.

What is financial hardship?

Financial hardship is when you are unable to or are finding it extremely difficult to, pay your bills and everyday expenses. Sometimes financial hardship may occur after a change in your personal circumstances, which can include: losing your job, a personal relationship breaking down, the death of a loved one or having to cover unexpected medical expenses.

When you experience financial hardship, you may find yourself struggling to pay your rent or mortgage, credit card or loan repayments, or even your everyday expenses like food and transport costs.

What to do if you’re experiencing financial hardship

If you are experiencing financial hardship it’s important to utilise the services available to you, and look at all your options. If you leave things too long, you could find yourself in a bad situation that can damage future chances of applying for credit.

You could also get items repossessed or lose your home, and the circumstances can cause a huge amount of stress for you and your family.

Get financial counselling

The first step is reaching out for help. Don’t feel embarrassed to do this.

A financial counsellor is much more than someone who gives guidance on money issues but can genuinely help to relieve the stress debt collectors, uninsured car accidents, unpaid fines etc can cause. Financial counsellors can:

  • Determine whether you meet the requirements for specific government grants
  • Help negotiate more advantageous repayment terms with creditors
  • Explain some of your options, such as bankruptcy and debt recovery, as well as their consequences
  • Help you deal with threatening letters from debt collectors
  • Assist with issues such as house evictions
  • Help you organise a budget and your finances
  • Refer you to other services

The great thing about financial advice is that it doesn’t have to cost anything. These counsellors will also keep your anonymity to protect your identity.

  • MoneyTalks is a financial helpline run by FinCap that gives free budgeting advice to Kiwis to improve their financial situation. You can call a financial mentor on 0800 345 123, email: or use their live chat to get in touch.
  • Alternatively, you can contact the New Zealand Federation of Family Budgeting Services (NZFFBS). They offer free budget advice to Kiwi families and individuals. You can contact them by email through “Kiwi Families” at
  • You can call the Citizens Advice Bureau on 0800 367 222 to find a local budgeting service.

How to apply for hardship with your bank or lender

Banks and lenders have programmes in place to help you if you are experiencing unforeseen financial hardship and can’t meet debt repayments. Depending on your situation and your lender, the terms of your loan may be extended so that your repayments are lower, or your repayments may be put on hold for a period of time.

Here’s how the process works:

  • You notify the bank about your financial hardship. This can be verbally or in writing and simply involves telling the bank you cannot, or think you cannot, afford your repayments.
  • The bank asks you for information. This may include a statement of your financial position (income, expenses), details of your employment and income, plus evidence of your medical circumstances if relevant.
  • The bank assesses your application. It will take into account the reason for your hardship, your finances, your ability to rehabilitate your circumstances and whether you have received hardship in the past.
  • You are notified of the outcome in writing. If the bank agrees to provide hardship assistance you need to comply with the terms of the agreement. If your hardship application is not approved your credit contract will not be altered.
  • If your application isn’t approved. The bank may suggest alternatives such as government support programs or financial counselling.

There are some criteria around who can apply for financial hardship and you can only make one application in a four-month period on the same grounds.

You’re not eligible to apply if you have missed a minimum of four consecutive debt repayments, have been in default for two months or more, or have received a Property Law Act notice or repossession warning and have continued to be in default for a further two weeks or more.

To avoid being ineligible, it’s worth reaching out as soon as you know that you can’t meet repayments.

What to do if you can’t pay your utility bills

If you are struggling to pay your electricity, phone or gas bills you need to contact your utility supplier. Similar to your credit provider, your utility provider will have a hardship process in place.

Once you call your provider you can ask to speak to a hardship officer who may help you work out a plan to pay the bill in instalments. You can also consider calling a financial counsellor or applying for help through WINZ.

If you are not happy with the response of your energy company to your application for hardship, you can lodge a complaint with the Commerce Commission.

WINZ hardship assistance

Work and Income provides hardship assistance to Kiwis who don’t have another way to pay for essential costs and expenses. This is done by way of one-off payments, emergency grants and temporary additional support.

You don’t necessarily have to be unemployed or already receiving a benefit to get hardship assistance, as there are different criteria to meet.

However, you need to be able to prove to WINZ that you are unable to pay for things yourself – this includes verifying your income and the value of your cash assets.

You can apply for hardship assistance by registering with MyMSD, Work and Income’s online tool, or alternatively ring 0800 559 009 to make an appointment or visit your local service centre.

Here’s what’s available:

Special Needs Grant

If you have an emergency cost or an essential expense that you have no other way of covering, a Special Needs Grant is a one-off payment.

Types of emergency and essential costs that you can apply for a Special Needs Grant for include:

  • Food
  • Dental treatment
  • Ambulance fees
  • Bedding
  • Driver’s licence fees
  • Wigs
  • Medical equipment
  • Car repairs
  • Funeral costs
  • Utility bills
  • School costs

You don’t need to be on a benefit, but must be earning under a specified amount. This varies depending on your age, relationship status and whether you have dependents. You must also have assets that are worth less than the stated amount for individuals or couples.

There are many reasons to apply for a Special Needs Grant. In most cases, you will not need to pay the money back, but in some situations, you will. It’s also worth remembering that there are limits as to how much you can apply for.

Temporary Additional Support

Temporary Additional Support is a type of benefit that is paid out for 13 weeks and you could be eligible even if you are not already receiving a benefit.

This payment is intended to cover essential living expenses that you aren’t able to cover for a temporary period, such as insurance and car repayments. You’ll need to show that the costs you have are essential and that you are making an effort to increase your income or reduce your costs. The amount you can receive depends on your income, assets, types of costs and whether there is other assistance you are eligible for from WINZ.

Advance Payment of Benefit

If you’re already receiving a benefit but have unexpected emergency costs or an essential expense, you may be eligible for an advance payment.

The Advance Payment of Benefit can be used for things like:

  • Clothing
  • Bond for a rental property
  • Glasses
  • Dentures and hearing aids
  • School costs
  • Home repairs
  • Car repairs
  • Furniture and appliances

Your advance payment is given to you on a payment card that works like a debit card. You will need to pay it back, usually as a deduction on future benefit payments.

Emergency Benefit

WINZ has a range of benefits and support options to suit different circumstances including Jobseeker Support and Sole Parent Support. If you don’t qualify for one of these, an Emergency Benefit is a last resort.

WINZ doesn’t provide too many details on its website as to what you could get and the eligibility criteria, but you can phone 0800 559 009 to apply.

Am I eligible?

If you are not sure what type of assistance you are eligible for, The Ministry of Social Development has a handy ‘check what you can get‘ tool. You will need to answer a series of questions and then you will be presented with possible options. This tool is only a guide, so you will need to speak to WINZ by phone or in-person to understand exactly what you are eligible for.

Before you get in touch, get together your bank statements, bills and any other paperwork that will help support your application for hardship assistance.

Visit the Work and Income website for more information.

Alternatives to applying for financial hardship

If your application for financial hardship isn’t accepted or you don’t want to apply just yet, you can try to determine what is causing your financial problems. There are many articles to help you get in control of your finances, but you can start by:

  • Get in control of your finances. There are many articles to help you manage your finances better, but you can start by: drawing up a budget, scrutinising your spending habits or getting an accountability partner.
  • Free legal advice. If you’re in debt and are also experiencing legal issues you can access free legal help through Community Law.
  • No interest loans. The no-interest loan scheme (NILs) is an initiative of community organisation Good Shepherd New Zealand. You can apply for a loan of up to $1,000 for 12–18 months with no interest and no fees. They are for people on low incomes who are Community Service Card holders and are designed to purchase essential household goods and services. Ngā Tangata Microfinance is another trust that offers no-interest and fee-free loans. It offers two loans, an Asset Building loan, to be used for necessities such as medical or dental costs, bedding and whiteware and a Debt Relief loan that you can only use to pay off another high-interest loan.
  • Early release of KiwiSaver. There are certain situations where you can access your KiwiSaver early.
  • Debt consolidation loan. If you have any type of credit contract with a lender, such as a home loan, personal loan or credit card, you might want consider a debt consolidation loan to manage your payments. Also, remember by law you have the right to apply for a hardship variation.

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